DCIT, CC-XXI, Kolkata, Kolkata V. Shri Rohit Goyal, Kolkata

ITA 236/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2551 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 06-05-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 04-02-2010
• Court: TRIBUNAL
• Keywords: Gift
• Section: 271(1)(c); 153A; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : KOLKATA [ BEFORE SHRI B.R. MITTAL, J.M. & SHRI C.D. RAO, A.M. ] I.T.A.NO. 236 (KOL) OF 2010 ASSESSMENT YEAR 2004-05 DY.COMMISSIONER OF INCOME-TAX, -VS- SRI ROHIT GOYAL C.C.-XXI, KOLKATA. KOLKATA.( P AN-ACTPA8007A) ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SRI SANJAY BARA, SR. D.R. RESOPONDENT BY : SRI A.K. TIBREWAL. O R D E R PER SRI C.D. RAO, A.M. : THE APPEAL BY THE REVENUE ARISES OUT OF THE ORDER DATED 07/10/2009 OF THE C.I.T.(A), CENTRAL-II, KOLKATA FOR ASSESSMENT YEAR 2004-05, DELETING PENALTY OF RS.3,46,500/- IMPOSED BY THE A .O. U/S. 271(1)(C) OF THE I.T. ACT, 1961. IN THIS APPEAL, THE DEPARTMENT HAS TAKEN THE FOLLOWING GROUNDS :- (1) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE PENALTY U/S. 271(1)(C) OF RS.3,46, 500/- IN RESPECT OF BOGUS GIFTS WITHOUT APPRECIATING THE FACT THA T THE AMOUNT OF RS.10,50,000/- WAS NEITHER DISCLOSED IN THE ORIG INAL RETURN NOR IN THE RETURN FILED IN RESPONSE TO NOTICE U/S. 153A. (2) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN HOLDING THAT THE ASSESSEES OFFER GIFT OF RS.10,50,000/- FOR TAXATION CANNOT BE HELD CONCEALMENT OF I NCOME OR FILING OF INACCURATE PARTICULARS OF SUCH INCOME, WITHOUT APPRECIATING THAT THIS AMOUNT OF RS.10,50,000/- WOULD NOT HAVE BEEN DISCLOSED HAD THERE BEEN NO INITIATION OF ENQUIRY BY T HE A.O. DURING ASSESSMENT PROCEEDING. 2. THE FACTS OF THE CASE ARE THAT SEARCH & SEIZURE OPERAT IONS U/S. 132 OF THE ACT WERE CONDUCTED ON 18/1/2006. IN COURSE OF THE SAID SEARCH, A DISCLOSURE STATEMENT WAS FILED BEFORE THE DDIT (INV) BY TH E ASSESSEES FATHER SRI BIRDHI CHAND GOEL WHEREIN HE OWNED UP ALL THE UNRECORD ED TRANSACTIONS. NO UNDISCLOSED INCOME OR ASSET WAS DETECTED DURING THE SAID SEARCH & SEIZURE ACTION IN THE NAME OF THE ASSESSEE. THE ASSESSEE OFFERED VOLUNTARILY THE SUM 2 OF RS.10,50,000/- TO TAX IN COURSE OF THE ASSESSMENT PROC EEDINGS REPRESENTED GIFT RECEIVED FROM VARIOUS PERSONS. IT WAS STATED BY THE ASSESSEE BEFORE THE A.O. THAT THE RECEIPT OF SUCH GIFT APPEARED IN THE ACCOUN TS SUBMITTED ALONG WITH THE REGULAR RETURN OF INCOME AND NECESSARY DETAILS LIK E COPIES OF GIFT DEEDS AND ACKNOWLEDGEMENT OF INCOME-TAX RETURN WERE PR ODUCED DURING ASSESSMENT PROCEEDINGS AND THAT IT WAS NOT POSSIBLE FOR HIM TO PRODUCE THESE DONORS AFTER A TIME SPAN OF HALF A DECADE. THEREFORE, IN O RDER TO AVOID LITIGATION AND TO BUY PEACE OF MIND, THE ASSESSEE HAD OFFERE D THE SAID GIFT TO THE INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL WITH AN UNDERSTANDING THAT THE ASSESSEE SHALL NOT BE PENALIZED IN ANY MANNER FOR S UCH AN ACTION. IT WAS ALSO SUBMITTED THAT THE REVISION OF INCOME WAS NOT THE RESULT OF ANY INVESTIGATION MADE BY THE A.O. THE ASSESSMENT HAS BEEN COMPLETED ON THE BASIS OF INCOME VOLUNTARILY DISCLOSED BY THE ASSESSEE AND THE ADDITIONAL AMOUNT OFFERED TO TAX HAD NOT BEEN THE RESULT OF ANY DE TECTION MADE BY THE A.O. IN COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE A .O. IMPOSED THE PENALTY BY OBSERVING THAT THE ASSESSEES OFFERING OF GIFT O F RS.10,50,000/- FOR TAXATION CAN BE HELD AS CONCEALMENT OF INCOME OR FILING OF IN ACCURATE PARTICULARS SINCE THE ASSESSEE WOULD NOT HAVE BEEN DISCLO SED THE SAME IF THE SEARCH & SEARCH OPERATION HAS NOT BEEN CONDUCTED. 3. ON APPEAL, THE ASSESSEE REITERATED HIS SUBMISSIONS MAD E BEFORE THE A.O. AND FURTHER HE RELIED ON THE DECISIONS IN THE FOLLOWING CA SES IN SUPPORT OF HIS CONTENTION THAT ON THE FACTS AND CIRCUMSTANCES OF TH E CASE, NO PENALTY U/S. 271(1)(C) WAS IMPOSABLE :- (A) K.C. GUILDERS VS. ACIT [265 ITR 562 (SC)] (B) CIT VS. BIMAL KUMAR DAMANI [261 ITR 87 (CAL)] (C) NATIONAL TEXTILES VS. CIT [249 ITR 125 (GUJ)] BASED ON THE SUBMISSIONS AND KEEPING IN VIEW THE RATIO LA ID DOWN BY THE HONBLE COURTS IN THE AFORESAID CASES AS RELIED UPON BY T HE ASSESSEE, THE LD. C.I.T.(A) DELETED THE PENALTY OF RS.3,46,500/- BY OBSERVING AS UNDER :- 4. I HAVE GONE THROUGH THE PENALTY ORDER, ASSESSMENT ORDER AND SUBMISSIONS OF APPELLANT. FACTS OF THIS CASE SHOW THAT A PPELLANT HAD SHOWN THE GIFTS OF RS.10,50,000 IN THE ORIGINAL RETURN OF INCOM E AND ALSO IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/ S. 153A OF THE 3 I.T.ACT. THERE IS NO FINDING OF FACT BY THE ASSESSING OFFICER THAT THESE GIFTS IN ANY WAY REPRESENTED THE CONCEALED INCOME OF APP ELLANT. APPELLANT HAD SUBMITTED THE GIFT DEEDS AS WELL AS THE INCO ME TAX RETURN ACKNOWLEDGEMENT COPIES OF ALL THE DONORS TO THE ASSESSING OFFICER. AFTER THIS ACT ACT OF APPELLANT, THE ONUS IS ON THE ASSESSING OFFICER TO PROVE THAT SUCH PARTICULARS FILED BY THE APPELLANT ARE INACCURAT E OR SUCH GIFTS REPRESENTED THE CONCEALED INCOME OF THE APPELLANT. ASSES SING OFFICER HAS NOT STATED IN EITHER THE PENALTY ORDER OR THE ASSE SSMENT ORDER THAT THE PARTICULARS OF GIFT SUBMITTED BY APPELLANT WERE FOUND FA LSE BY THE ASSESSING OFFICER. APPELLANT OFFERED THESE GIFTS FOR TAXATION B ECAUSE IT WAS NOT POSSIBLE FOR HIM TO PRODUCE THE DONORS BEFORE TH E ASSESSING OFFICER AS THERE WAS LONG GAP OF TIME SINCE THE GIFTS WERE MADE TILL THE ENQUIRY UNDER ASSESSMENT PROCEEDINGS IN CONSEQUENCE OF SEARCH WAS MADE. THEREFORE, I FIND THAT THE APPELLANT OFFERED THE AMO UNT OF GIFT OF RS.10,50,000 FOR TAXATION TO AVOID LITIGATION WHICH IS A BONA FIDE EXPLANATION IN VIEW OF THE CIRCUMSTANCES MENTIONED ABOVE. F URTHER, THE ASSESSING OFFICER DID NOT FIND THE DETAILS OF DONORS FILED BY A PPELLANT AS FALSE AND THEREFORE IT CANNOT BE SAID THAT THE OFFER OF SUC H GIFTS FOR TAXATION BY APPELLANT REPRESENTED ANY CONCEALMENT OF INCO ME OR FILING OF INACCURATE PARTICULARS OF SUCH INCOME. IN VIEW OF THESE FA CTS, THE PENALTY OF RS.3,46,500/- LEVIED BY ASSESSING OFFICER U/S 271(1 )(C) IS HEREBY DELETED. AGGRIEVED BY THIS ORDER OF THE LD. C.I.T.(A), THE REVENUE IS IN APPEAL BEFORE U S. 4. AT THE TIME OF HEARING BEFORE US, THE LD. DEPARTMENT AL REPRESENTATIVE HAS REITERATED THE GROUNDS RAISED IN THE MEMORANDUM OF APPEAL AND FURTHER HEAVILY RELIED ON THE ORDER OF THE A.O. AND CONTENDED TH AT THE ASSESSEE WOULD NOT HAVE DISCLOSED THESE GIFTS IF THE SEARCH & SEIZURE OPE RATION HAS NOT BEEN CONDUCTED AT THE PREMISES OF THE ASSESSEE. HE, THEREFOR E, REQUESTED FOR REVERSAL OF THE ORDER OF THE LD. C.I.T.(A) AND RESTORE THAT OF THE A.O. 5. ON THE OTHER HAND, THE LEARNED COUNSEL APPEARING ON BEHALF OF THE ASSESSEE HAS RELIED ON THE ORDER OF THE LD. C.I.T.(A) AND FURTHER SUBMITTED THAT THE CASE OF THE ASSESSEE IS COVERED BY THE FOLLOWING THRE E DECISIONS OF THE TRIBUNAL, IN ADDITION TO THE JUDGMENTS RELIED ON BEFORE THE LD. C.I.T.(A) :- (A) ITA NOS.4718 & 4719/MUM/08 M/S. UNI TEX PRODUCTS PVT. LTD. [ITAT, MUMBAI BENCH F, MUMBAI] (B) ITA NOS.175 TO 178/KOL/09 DCIT VS. SHRI SAMIT ROY & ORS. [ITAT, KOLKATA BENCH C, KOLKATA] (C) (2009) 31 SOT 97 (DELHI-TM) - ADDL.CIT VS. PREM CHAND GARG. 4 HE, THEREFORE, REQUESTED TO UPHOLD THE ORDER OF THE LD. C.I .T.(A) CANCELLING THE PENALTY IMPOSED BY THE A.O. U/S. 271(1)(C) OF THE ACT. 6. AFTER HEARING THE RIVAL SUBMISSIONS, CAREFULLY PERUSING TH E ORDERS OF THE AUTHORITIES BELOW AND RECORD AVAILABLE TO US WE FIND THAT D URING SEARCH & SEIZURE OPERATION NO INCRIMINATING DOCUMENTS FOR THE CONCE ALED INCOME HAS BEEN FOUND. HOWEVER, THE ASSESSEE HIMSELF HAS VOLUNTARILY OFFERED THESE GIFTS KEEPING IN VIEW THE FACT THAT IT WAS NOT POSSIBLE FOR THE A SSESSEE TO PRODUCE THESE DONORS AFTER THE TIME SPAN OF HALF DECADE. FURTHE R, IN ORDER TO AVOID LITIGATION AND TO BUY PEACE OF MIND, THE ASSESSEE HAS OFFER ED THE SAID GIFTS AS INCOME FOR THE ASSESSMENT YEAR 2004-05 WITH AN UNDERST ANDING THAT THE ASSESSEE SHALL NOT BE PENALIZED IN ANY MANNER FOR SUCH AC TION. IN VIEW OF THE ABOVE, IN OUR CONSIDERED OPINION, THIS OFFER OF THE ASSESSE E IS NEITHER BE TREATED AS FILING OF INACCURATE PARTICULARS NOR CONCEALMENT OF INCOME AND THE LD. C.I.T.(A) HAS OBSERVED THE SAME WHILE DELETING THE PENALTY . THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. C.I.T.(A) TO BE INFERRED WITH. HENCE WE CONFIRM HIS ORDER DELETING THE PENALTY OF RS.3,46,500/- LEVIED BY THE A.O. U/S. 271(1)(C) OF THE ACT. 7. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. ORDER IS PRONOUNCED IN THE COURT ON 18.06.2010. SD/- SD/- [B.R. MITTAL] [C.D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 -06-2010 COPY FORWARDED TO : 1. SRI ROHIT GOYAL, 8, CAMAC STREET, KOPLKATA-700 017. 2. DCIT, C.C.-XXI, KOLKATA. 3. C.I.T.(A), CENTRAL-II, KOLKATA. 4. CIT, KOL - 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, KOLKATA. TRUE COPY, BY ORDER [ DKP] DY. REGISTRAR.